Kuala Lumpur, Malaysia (AP) — Malaysian carmaker Proton may cut its sales target for the 2007 financial year after posting huge losses in the first quarter, its top official said Friday.
Proton’s share in the domestic passenger car market has deteriorated to 32.4 percent currently and market conditions appear increasingly “tough,” Chief Executive Syed Zainal Abidin Syed Mohamad Tahir told reporters.
“We are looking at reviewing the targets to see if we can set more reasonable targets,” he said, without elaborating.
Proton has earlier said it aims to boost its domestic passenger car market share to 45.8 percent for the fiscal year ending March 31, 2007, from 41.4 percent in fiscal 2006, and raise export sales to 8.6 percent of total revenue, from 5.2 percent previously.
It blamed poor sales for a net loss of $16 million in the quarter through June, compared with a loss of $3.4 million in the same period a year earlier. Its revenue plunged 31 percent on-year to $387 million.
Syed Zainal said Proton “hopes to get something out by the end of the year” to revamp its business. It is still in exploratory talks with France’s PSA Peugeot Citroen, he said but didn’t give details.
Aside from talks with Peugeot, Proton is also tying up with China’s Chery Automobile to build and sell each other’s cars in China and Southeast Asia. It currently has a technology alliance with Japan’s Mitsubishi Motors Corp.
New motor vehicles sales in Malaysia, Southeast Asia’s biggest passenger car market, fell 5.1 percent on-year in July, the Malaysian Automotive Association said last month.
The association predicted sales this year to dip to 520,000 units, a 5.6 percent decline from 2005 record sales of 551,042 vehicles.
Proton is under heavy pressure from foreign carmakers as well as local rivals. Second national carmaker Perodua, part-owned by Japan’s Daihatsu Motor Co. Ltd., has so far outsold Proton in Malaysia for the first time ever.
Proton, which aims to boost exports via alliances with foreign carmakers, has said it plans to tap large consumer markets in China, India and Southeast Asia to raise exports to 100,000 cars by 2008.
